While it is taking longer to close a home loan, the closing ratio has improved — especially on refinance transactions.
It took 50 days to process and close a mortgage in September, lengthening from the 49-day turnaround the previous month and 41 days in the same month last year. The number of days to close has increased each month since April, when it took only 42 days to close a loan.
The increase from August was due to refinance transactions, which took 53 days versus the 51 days in August. Purchase turnaround was unchanged at 47 days.
The monthly statistics were discussed in Ellie Mae’s Origination Insight Report released Wednesday. The data was mined from a one-third sampling of applications run through the Encompass360 platform. Ellie, a Mortgage Daily advertiser, claims that 20 percent of all new residential loans utilized the platform last year.
Of all loans that had been in process for at least 90 days, 50.5 percent closed in September. The closing rate improved from 47.8 percent in August. The refinance closing rate increased to 45.3 percent from 40.9 percent, and the purchase closing rate moved up to 61.0 percent from 60.1 percent.
Ellie reported that the average FICO score on September production was 750, the same as the previous month. But credit scores improved from 748 in September 2011. Borrowers who were denied approval had an average FICO of 704, four points lower than in August but higher than 697 a year prior.
The average loan-to-value ratio was 78 percent, better than 79 percent in August and 76 percent in September 2011. LTV ratios on denied applications were unchanged from 88 percent and up from 82 percent a year earlier.
At 23/34, no change was reported in the average debt-to-income ratio. But DTI ratios were lower than 24/35 in the same month last year. On denied applications, DTI ratios were 27/44 versus 27/43 in the prior month and 29/45 in the same month during the prior year.
Refinance share climbed to 65 percent from 61 percent three months earlier and 60 percent a year earlier.
Loans insured by the Federal Housing Administration accounted for 19 percent of last month’s activity, edging down from 21 percent in August and falling from 24 percent in September 2011.
Fifteen-year share was 17.3 percent, a little wider than 16.8 percent in August.
The share of borrowers who opted for an adjustable-rate mortgage was 2.6 percent, inching down from the previous month’s 2.7 percent.
